Legal issues arising from the RIAA's lawsuits of intimidation brought against ordinary working people, and other important internet law issues. Provided by Ray Beckerman, P.C.

Sunday, March 22, 2009

Obama's Justice Department intervenes on side of RIAA in SONY BMG Music Entertainment v. Tenenbaum

In its first opportunity to demonstrate its position on the constitutionality of the Copyright Act's statutory damages provisions as applied to mp3 files having a market value of 99 cents or less, the Obama Justice Department -- staffed by RIAA lawyers in its 2nd and 3rd highest positions -- has filed a motion for intervention and brief in SONY BMG Music Entertainment v. Tenenbaum which attempts to support the RIAA's statutory damages theory.

The brief:

1. relied upon St. Louis, IS & M Ry Co v. Williams, 251 US 63 (1919) a 1919 United States Supreme Court decision which upheld, as against due process attack, a statute awarding statutory damages against a large railroad corporation which were 116 times the actual damages sustained, in cases involving the rail carrier's overcharging of its customers, on the ground that under the circumstances the award was not so severe and oppressive as to be wholly disproportionate to the offense and obviously unreasonable;

2. relied upon the decision of the US Court of Appeals for the 6th Circuit in Zomba v. Panorama, 491 F.3d 574 (6th Cir. 2007), which held that until such time as the US Supreme Court applies the State Farm/Gore test, rather than the Williams test, to statutory damages, the less stringent Williams standard would be applied, and upheld a statutory damages award equal to 44 times the actual damages, in a case of wilful copyright infringement by a karaoke disc distributor, since 44 times actual damages was less onerous than the 116:1 multiple upheld by the Williams court;

3. conceded that statutory damages are subject to due process review for excessiveness, but argued that the less demanding Williams standard, rather than the higher State Farm/Gore standard, should be applied;

4. attempted to refute the arguments made by the defendant in his brief; and

5. ignored all of the authorities and all of the arguments cited by the Free Software Foundation in its amicus curiae brief.

[Ed. note. (1) Odd, don't you think, that the Government ignored the authorities cited in FSF's amicus curiae brief? Maybe they thought Judge Gertner wouldn't be able to find them, so they'd be better off not mentioning them. (2) Sad that the Obama administration, which purports to be for 'the little guy', supports statutory damages of from 2,100 to 425,000 the actual damages, imposed against 'the little guy', to be awarded to big corporations. (3) Fortunately the courts will probably not be as cooperative, since the Government's brief is noticeably weak and fails to stand up to scrutiny; if that's the best argument, and those are the best authorities, the RIAA's friends can come up with, they're dead in the water on the Due Process issue. -R.B.]

The positives about the brief arethat (a) it asks Judge Gertner to defer ruling on the issue until the factual record is developed and a verdict handed down, and (b) it concedes that the excessiveness of a statutory damages award is subject to due process analysis.

Interestingly, the best authority it could come up with was a 1919 decision, in a very very different context and very very different type of statute, which upheld a ratio of 116:1.

Even applying that very high multiple to today's RIAA cases, the statutory damages award for downloading an mp3 file would be $40, which is a far cry from the $750 to $150,000 which the RIAA is trying to claim.

Of course one of the bizarre things about the brief is that it IGNORES Parker v Time Warner, Napster, UMG v Lindor, Atlantic v Brennan, the Texas Law Review article, and the Georgetown Law Review article. That is the kind of 'advocacy' we've come to expect from the RIAA lawyers (witness Lava v. Amurao where their reply briefs never even mentioned the recent line of authorities from the 7th Circuit which defendant had cited), but I am a bit surprised to see it coming from Government lawyers.

Incidentally, if you saw that headline the other day which went something like:

"Press Banned From White House Press Ceremony,"

you'll already know that all this Change business was a complete and utter smokescreen. We'll close Guantanamo Real Soon Now. We'll get out of Iraq Real Soon Now. We'll stop supporting big [banks, content amalgamators, etc] over ordinary people Real Soon Now. But until then, everybody as you were. Pfft.

Honestly, this brief has some good parts. If the statutory damages provisions in the Copyright Act are illegal, then wouldn't the statutory damages provisions in numerous consumer protection and civil rights laws also be illegal?

I'm curious about something. You've lambasted the Obama DOJ for hiring RIAA/MPAA lawyers, yet, per the Brief, I don't think any of those particular lawyers are involved with the lawsuit. Couldn't these people be Bush-era holdovers?

Ray, you may have found this action from Obama and his appointees disappointing - this man just found it expected.

Barrack Obama is proving out to be exactly what this man expected him to be from well before the election. If you're surprised, or disappointed, then quite simply you didn't know who, or what, you were voting for.

This man's only disappointment is that although he wasn't scammed by slick speeches and impossible promises from a teleprompter president, that he still now has to live in the country that was and pay the price for that until it can be corrected.

His true disappointment is with the 55M voters that actually thought this would be an improvement during these difficult times. Democracy is sometimes far less than perfect, and can require a long time to excise its overindulgences.

Sam, nobody argued statutory damages are generally unconstitutional. Here we're looking at statutory damages astronomically greater than actual damages as well as other important factors. You should probably read defendant's and FSF's briefs.

Unrelatedly...

"In establishing the current range of statutory damages, Congress reasonably determined such damages are necessary to compensate copyright owners and deter infringement in the face of new computer technologies.."

In this case, actual damages are small or nothing. And large statutory damages apparently are not an effective deterrent. So I don't see how Congress could have "reasonably determined" the range of statutory damages.

The brief has great stuff in it. It clearly concedes that statutory damages must be subjected to due process review for excessiveness. I cannot imagine Mr. Tenenbaum losing on that issue in the event that there were to be an award of statutory damages of $750 or more per mp3.

The only thing you rejected was a viewpoint different than your own held by somebody who has no problem with the copyright law being enforced against those who opnely flout it by stealing the work of others. If you choose to conflate support of the copyright law with working for the recording industry, then I find that very unbecoming.

Maybe this case does not have the right players to resolve this situation, but I sure wish statutory damages would go away.

I understand the concern with situations where the cost of determining damages far exceeds the actual damage, but setting a fixed minimum value is a horrible way to address this. Once you remove the requirement for the plaintiff to assert their damages, there is no way to allow for due process. When no value claim is made, any fixed value award will be an infinite amount of times greater.

If congress had attempted to allow due process, and had (hypothetically) determined that a 10 times multiplier was appropriate, then in order to claim a $ 750 award the plaintiff would have to show $ 75 in actual damages. This does not seem to be an excessive burden on the plaintiff.Even if I still though this was excessive, at least I would not be liable for damages that never occurred.

Given how easy and how often things are copied when using a computer, and how difficult it would be to get approval from all Copyright holders in advance, I am looking for some relief from all of the liability that I have as a result of the Copyright law. Setting up a bounty system for Copyright holders is not in my best interests.

If anyone ever seriously contested these cases, it is unlikely the RIAA could recover statutory damages on each of the songs; in some of the cases they couldn't recover statutory damages on ANY of the songs.

This man questions if it is an actual positive to defer the ruling on this issue until much further down the line - provided that this case ever comes a final decision. Until it is overturned the status quo remains unchanged not only for this Defendant, but for all similarly situated defendants. As such, statutory damages remain in place until some judge somewhere finally does rule otherwise.

To this man, keeping everything as it is now in a case that is likely to be settled or dismissed rather than fully litigated only benefits these Plaintiffs in their pursuit of terror, aided and abetted by unconstitutionally excessive fines with no relationship to any actual damages, into the foreseeable future.

I am a business lawyer in New York City, practicing at Ray Beckerman, P.C.. The purpose of this site is to collect and share information about the wave of sham "copyright infringement" lawsuits started by four large record companies, and other areas of concern to digital online copyright law, and to internet law in general. -Ray Beckermanbeckermanlegal.com(Attorney Advertising)

"[T]he Court is concerned about the lack of facts establishing that Defendant was using that IP address at that particular time. Indeed, the [complaint] does not explain what link, if any, there is between Defendant and the IP address. It is possible that Plaintiff sued Defendant because he is the subscriber to IP address .... As recognized by many courts, just because an IP address is registered to an individual does not mean that he or she is guilty of infringement when that IP address is used to commit infringing activity." -Hon. Barry Ted Moskowitz, Chief Judge, S.D. California. January 29, 2013, AF Holdings v. Rogers"The complaints assert that the defendants – identified only by IP address – were the individuals who downloaded the subject “work” and participated in the BitTorrent swarm. However, the assumption that the person who pays for Internet access at a given location is the same individual who allegedly downloaded a single sexually explicit film is tenuous, and one that has grown more so over time." - Hon. Gary R. Brown, Magistrate Judge, E.D.N.Y. May 1, 2012, K-Beech v. Does 1-37"The concern of this Court is that in these lawsuits, potentially meritorious legal and factual defenses are not being litigated, and instead, the federal judiciary is being used as a hammer by a small group of plaintiffs to pound settlements out of unrepresented defendants."-Hon. S. James Otero, Dist. Judge, Central Dist. California, March 2, 2007, Elektra v. O'Brien, 2007 ILRWeb (P&F) 1555"The University has adequately demonstrated that it is not able to identify the alleged infringers with a reasonable degree of technical certainty...[C]ompliance with the subpoena as to the IP addresses represented by these Defendants would expose innocent parties to intrusive discovery....[T]he Court declines to authorize discovery and quashes the subpoena as to Does # 8, 9, and 14" -Hon. Nancy Gertner, Dist. Judge, Dist. Massachusetts, November 24, 2008, London-Sire Records v. Does 1-4"[C]ounsel representing the record companies have an ethical obligation to fully understand that they are fighting people without lawyers... that the formalities of this are basically bankrupting people, and it's terribly critical that you stop it...." -Hon. Nancy Gertner, Dist. Judge, Dist. Massachusetts, June 17, 2008, London-Sire v. Does 1-4"Rule 11(b)(3) requires that a representation in a pleading have evidentiary support and one wonders if the Plaintiffs are intentionally flouting that requirement in order to make their discovery efforts more convenient or to avoid paying the proper filing fees. In my view, the Court would be well within its power to direct the Plaintiffs to show cause why they have not violated Rule 11(b) with their allegations respecting joinder. [I]t is difficult to ignore the kind of gamesmanship that is going on here.....These plaintiffs have devised a clever scheme... to obtain court-authorized discovery prior to the service of complaints, but it troubles me that they do so with impunity and at the expense of the requirements of Rule 11(b)(3) because they have no good faith evidentiary basis to believe the cases should be joined." -Hon. Margaret J. Kravchuk, Magistrate Judge, District of Maine, January 25, 2008, Arista v. Does 1-27, 2008 WL 222283, modified Oct. 29, 2008"[N]either the parties' submissions nor the Court's own research has revealed any case holding the mere owner of an internet account contributorily or vicariously liable for the infringing activities of third persons.....In addition to the weakness of the secondary copyright infringement claims against Ms. Foster, there is a question of the plaintiffs' motivations in pursuing them..... [T]here is an appearance that the plaintiffs initiated the secondary infringement claims to press Ms. Foster into settlement after they had ceased to believe she was a direct or "primary" infringer." -Hon. Lee R. West, District Judge, Western District of Oklahoma, February 6, 2007, Capitol v. Foster, 2007 WL 1028532"[A]n overwhelming majority of cases brought by recording companies against individuals are resolved without so much as an appearance by the defendant, usually through default judgment or stipulated dismissal.....The Defendant Does cannot question the propriety of joinder if they do not set foot in the courthouse." -Hon. S. James Otero, Central District of California, August 29, 2007, SONY BMG v. Does 1-5, 2007 ILRWeb (P&F) 2535"Plaintiffs are ordered to file any future cases of this nature against one defendant at a time, and may not join defendants for their convenience."-Hon. Sam Sparks and Hon. Lee Yeakel, District Judges, Western District of Texas, November 17, 2004, Fonovisa v. Does 1-41, 2004 ILRWeb (P&F) 3053"The Court is unaware of any other authority that authorizes the ex parte subpoena requested by plaintiffs."-Hon. Walter D. Kelley, Jr., District Judge, Eastern District of Virginia, July 12, 2007, Interscope v. Does 1-7, 494 F. Supp. 2d 388, vacated on reconsideration 6/20/08"Plaintiffs contend that unless the Court allows ex parte immediate discovery, they will be irreparably harmed. While the Court does not dispute that infringement of a copyright results in harm, it requires a Coleridgian "suspension of disbelief" to accept that the harm is irreparable, especially when monetary damages can cure any alleged violation. On the other hand, the harm related to disclosure of confidential information in a student or faculty member's Internet files can be equally harmful.....Moreover, ex parte proceedings should be the exception, not the rule."-Hon. Lorenzo F. Garcia, Magistrate Judge, District of New Mexico, May 24, 2007, Capitol v. Does 1-16, 2007 WL 1893603"'Statutory damages must still bear some relation to actual damages." Hon. Michael J. Davis, Dist. Judge, U.S.District Court, Dist. Minnesota, January 22, 2010, Capitol Records v. Thomas-Rasset"[T]his court finds that defendants' use of the same ISP and P2P networks to allegedly commit copyright infringement is, without more, insufficient for permissive joinder under Rule 20. This court will sever not only the moving defendants from this action, but all other Doe defendants except Doe 2." -Hon. W. Earl Britt, District Judge, Eastern District of North Carolina, February 27, 2008, LaFace v. Does 1-38, 2008 WL 544992"[L]arge awards of statutory damages can raise due process concerns. Extending the reasoning of Gore and its progeny, a number of courts have recognized that an award of statutory damages may violate due process if the amount of the award is "out of all reasonable proportion" to the actual harm caused by a defendant's conduct.[T]hese cases are doubtlessly correct to note that a punitive and grossly excessive statutory damages award violates the Due Process Clause....."Hon. Marilyn Hall Patel, Dist. Judge, N.D. California, June 1, 2005, In re Napster, 2005 US DIST Lexis 11498, 2005 WL 1287611"[P]laintiffs can cite to no case foreclosing the applicability of the due process clause to the aggregation of minimum statutory damages proscribed under the Copyright Act. On the other hand, Lindor cites to case law and to law review articles suggesting that, in a proper case, a court may extend its current due process jurisprudence prohibiting grossly excessive punitive jury awards to prohibit the award of statutory damages mandated under the Copyright Act if they are grossly in excess of the actual damages suffered....."-Hon. David G. Trager, Senior District Judge, Eastern Dist. New York, November 9, 2006, UMG v. Lindor, 2006 U.S. Dist. LEXIS 83486, 2006 WL 3335048"'[S]tatutory damages should bear some relation to actual damages suffered'....(citations omitted) and 'cannot be divorced entirely from economic reality'". -Hon. Shira A. Scheindlin, Dist. Judge, Southern Dist. New York, August 19, 2008, Yurman v. Castaneda"The Court would be remiss if it did not take this opportunity to implore Congress to amend the Copyright Act to address liability and damages in peer to peer network cases.... The defendant is an individual, a consumer. She is not a business. She sought no profit from her acts..... [T]he damages awarded in this case are wholly disproportionate to the damages suffered by Plaintiffs." -Hon. Michael J. Davis, District Judge, Dist. Minnesota, September 24, 2008, Capitol v. Thomas"If there is an asymmetry in copyright, it is one that actually favors defendants. The successful assertion of a copyright confirms the plaintiff's possession of an exclusive, and sometimes very valuable, right, and thus gives it an incentive to spend heavily on litigation. In contrast, a successful defense against a copyright claim, when it throws the copyrighted work into the public domain, benefits all users of the public domain, not just the defendant; he obtains no exclusive right and so his incentive to spend on defense is reduced and he may be forced into an unfavorable settlement." US Court of Appeals, 7th Cir., July 9, 2008, Eagle Services Corp. v. H20 Industrial Services, Inc., 532 F.3d 620"Customers who download music and movies for free would not necessarily spend money to acquire the same product.....RIAA’s request problematically assumes that every illegal download resulted in a lost sale."-Hon. James P. Jones, Dist. Judge, Western Dist. Virginia, November 7, 2008, USA v. Dove